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Charity Sector Complexity Not to Be Ignored – ACNC Report

A ground-breaking report commissioned by the national charity regulator, which reveals a complex Not for Profit sector that has grown by two per cent annually, has delivered a warning that the sector’s diversity should not be ignored by policy makers.

Charity Sector Complexity Not to Be Ignored – ACNC ReportWednesday, 24th September 2014 at 4:26 pm

A ground-breaking report commissioned by the national charity regulator, which reveals a complex Not for Profit sector that has grown by two per cent annually, has delivered a warning that the sector’s diversity should not be ignored by policy makers.

The Australian Charities and Not-for-profits Commission’s Curtin Charities 2013 Report shows that Australian charities employ nearly one million people and that over 90 per cent of these are employed by only 10 per cent of charities.

Additionally, charities manage around two million volunteers. The sector has a combined total income of more than $100 billion, and the report revealed the sector has grown by two per cent annually since 1990.

It also found that the majority of regulatory burden is felt by a minority of charities.

The Curtin Charities 2013 Report was produced by the Curtin University Not-for-profit Initiative. The report analysed data from more than 38,000 charities registered with the Australian Charities and Not-for-profits Commission (ACNC).

The analysis was drawn from 38,341 Annual Information Statements submitted by charities in their first year of reporting to the ACNC (up to 30 June 2014).

The research also revealed wide-ranging findings:

In terms of charitable activities:

­Charities undertook a broad range of activities in 2012-13, ranging from religious, community development and research activities to emergency relief, animal protection and international pursuits.

Religious activities were the main the activity for more 25 per cent of charities, followed by primary and secondary education for 6 per cent of charities.­

Nearly 70 per cent of charities worked in one or more areas in addition to their main charitable activities.

In terms of how the reporting burden is experienced: ­

10 per cent of charities experience about 80 per cent of the total administrative burden.

In terms of employment of staff / volunteers:

­10 per cent of charities accounted for 90 per cent of full time jobs and nearly $90 billion of income in the sector.

­75 per cent of small charities do not employ full time staff

­The peak number of volunteers employed by organisations is between five and 19

Nearly 1 million people are employed across the sector

Curtin University Not-for-profit Initiative Director and Curtin Charities 2013 Report co-author Professor David Gilchrist said the charity sector was a large and extremely important part of the economy, and policy should be developed recognising this.

“The findings in this report challenge policy makers, those running charities and others active in supporting Australian charities to deconstruct their understanding of the sector, examine received wisdoms, and determine strategies that better meet the needs or opportunities of each individual sub-sector,” Gilchrist said.

“When the analysis of charity activities and beneficiaries is added, it is clear that it is an over simplification and inappropriate to treat Australian charities as a single sector.

“A hospital or higher education provider with income over $500m, employing 2,000 staff and providing complex services is a completely different entity to a small religious group or volunteer fire brigade – they have different objectives, risks and impact.

“All of these provide vital and valuable services, but every aspect of their activities and their relationships with stakeholders, including governments is vastly different.

“Charities are instrumental to the capacity of Governments in implementing policy and delivering services in key areas; particularly in health, aged care, disability services, education and housing.

“All Australians are affected in one way, shape or form by the work of charities and a strong and sustainable charity sector benefits everyone.

“We need tactical approaches to the development of policies that use an evidence- based approach to identifying the issues and needs of individual sub-groups.

Prof Gilchrist said the evidence was clear that a targeted strategy was needed for each sub-sector to effectively remove inappropriate administrative burden. Further, the multiplicity of activities being undertaken in conjunction with multiple funding sources, suggested a central Government agency was needed to drive change.

“The median time spent by charities in reporting to government was 40 hours a year. About 10 per cent of charities are experiencing about 80 percent of the administrative burden. These are primarily large organisations operating primarily in human services. Reporting requirements are often legitimately more substantial due to the risks associated with such activities,” he said.

“This report was made possible by the collection of data by the ACNC and there is no doubt that, as more data is collected and both regulators and charities become more adept at seeking and providing better information, better policy decisions and better strategic planning will follow.”

ACNC Commissioner Susan Pascoe AM said the Curtin Charities 2013 Report was valuable for anyone wanting to understand more about the charity sector, from the general public and charitable organisations, to researchers and policy makers.

“It is the first time such comprehensive, evidence-based analysis of the whole of the charitable sector has been available,” Pascoe said.

“The research shows the Australian charity sector is one of breadth and diversity. At one end, the minority of large charities command a substantial proportion of resources such as paid staff, volunteers and income, while at the other end, the vast majority of charities are small, volunteer-based organisations.

“The collection and analysis of these first Annual Information Statements provide the foundation for future research and greater understanding about the charity sector. As the volume of available data grows, a clearer picture will evolve of issues such as where and how the sector is growing, who is receiving their support, their funding sources, and the sector’s contribution to the economy.

“Registered charities’ 2014 Annual Information Statement will also help increase knowledge of the sector through the first collection of financial data.”

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